Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

capstone > economic > Flashcards

economic Flashcards

1
Q

What is the definition of accounting profit?

A) Total revenue minus opportunity costs
B) Total revenue minus total costs
C) Total revenue plus total costs
D) Total revenue minus taxes

A

B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which of the following formulas represents economic profit?

A) Profit = (Price × Quantity) - Total Costs
B) Profit = (Price × Quantity) + Total Costs
C) Profit = (Price × Quantity) - Total Costs - Opportunity Cost
D) Profit = (Price × Quantity) + Opportunity Cost

A

c

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is opportunity cost?

A) The cost of production materials
B) The potential earnings lost when choosing one option over another
C) The fixed costs of running a business
D) The total sales revenue

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

When making strategic choices, why is it important to know what to avoid?

A) It helps increase total sales revenue.
B) It can save money and resources for better opportunities.
C) It simplifies the decision-making process.
D) It ensures compliance with regulations.

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What does “total costs” refer to in a business context?

A) The revenue generated from sales
B) The total amount of money spent on producing and selling all goods
C) The profits made after selling products
D) The market value of the company

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Which of the following is NOT typically included in total costs?

A) Materials
B) Labor
C) Overhead
D) Market share

A

d

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Total costs encompass which of the following components?

A) Only fixed costs
B) Only variable costs
C) Both fixed and variable costs, including materials, labor, and overhead
D) Only costs related to labor

A

c

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the definition of average costs (AC)?

A) The total cost of production
B) The cost per unit of output
C) The profit per unit sold
D) The total revenue generated

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

ow is average cost calculated?

A) Average Cost = Total Revenue / Quantity
B) Average Cost = Total Costs / Quantity
C) Average Cost = Total Profit / Quantity
D) Average Cost = Total Sales / Quantity

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What does marginal cost (MC) refer to?

A) The total cost of production
B) The average cost per unit
C) The additional cost of producing one more unit
D) The fixed costs associated with production

A

c

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How is marginal cost calculated?

A) Marginal Cost = Total Costs / Quantity
B) Marginal Cost = Total Costs(Q+1) - Total Costs(Q)
C) Marginal Cost = Total Revenue - Total Costs
D) Marginal Cost = Average Cost × Quantity

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

If the marginal cost of producing an additional unit is higher than the average cost, what does this indicate?

A) Average costs will decrease.
B) Average costs will increase.
C) Total costs are minimized.
D) Production should be reduced.

A

b. If the cost to make one more unit is higher than the average cost of making all the units so far, it means that the overall average cost will go up. So, making that extra unit is not helping to lower costs—it’s actually raising them.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are fixed costs?

A) Costs that vary with production levels
B) Costs that do not change regardless of production levels
C) Costs that can be recovered after production
D) Costs associated with raw materials only

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of the following is an example of a fixed cost?

A) Cost of raw materials
B) Utility bills
C) Rent for office space
D) Wages for hourly employees

A

c

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are sunk costs?

A) Costs that can be easily recovered
B) Costs that have already been incurred and cannot be recovered
C) Costs that vary depending on production levels
D) Future costs expected in a project

A

b

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

If a company decides to invest in new machinery rather than expanding its marketing efforts, the potential revenue lost from the marketing is considered what type of cost?

A) Fixed cost
B) Sunk cost
C) Variable cost
D) Opportunity cost

A

D

17
Q

Why do costs matter in a company’s strategy?

A) They have no impact on market trends.
B) They determine the company’s most viable strategies.
C) They are irrelevant to competitive analysis.
D) They only affect profit margins.

A

b

18
Q

How do rivals’ cost structures influence a company?

A) They have no influence on competitive advantage.
B) They determine the product features offered.
C) They influence the sustainability of a company’s competitive advantage.
D) They only affect marketing strategies.

A

c

19
Q

A company with a lower cost structure than its rivals is likely to achieve which of the following?

A) Higher prices for its products
B) A sustainable competitive advantage
C) Increased fixed costs
D) Reduced production efficiency

A

b

20
Q

If a company understands its own cost structure and that of its rivals, what advantage does it gain?

A) It can ignore market changes.
B) It can develop more effective pricing and marketing strategies.
C) It can reduce its workforce without consequences.
D) It can increase its overhead costs without impacting profits.

A

b

21
Q

How is value defined in the context of a product or service?

A) The total cost of production
B) The perceived benefit compared to its cost
C) The price at which a product is sold
D) The quantity of goods produced

A

b

22
Q

What is the primary aim when it comes to understanding value?

A) To minimize production costs
B) To maximize value for both the customer and the business
C) To increase marketing expenditures
D) To enhance competition among rivals

A

b

23
Q

What does “willingness to pay” (WTP) represent?

A) The minimum price a seller will accept
B) The maximum amount a customer is willing to pay for a product or service
C) The average price in the market
D) The fixed costs associated with production

A

b

24
Q

What is consumer surplus?

A) The total cost of production
B) The difference between what consumers are willing to pay and what they actually pay
C) The profit earned by producers
D) The amount consumers spend on advertising

A

b

25
Q

How is consumer surplus calculated?

A) Consumer Surplus = Actual Price Paid − Willingness to Pay
B) Consumer Surplus = Willingness to Pay − Actual Price Paid
C) Consumer Surplus = Total Revenue − Total Costs
D) Consumer Surplus = Market Price − Producer Price

A

b

26
Q

What does economic surplus encompass?

A) Only the profit made by producers
B) The total value created in the economy, combining consumer and producer surplus
C) The costs incurred by consumers and producers
D) The total number of products sold in the market

A

b

27
Q

How is economic surplus calculated?

A) Economic Surplus = Consumer Surplus − Producer Surplus
B) Economic Surplus = Consumer Surplus + Producer Surplus
C) Economic Surplus = Total Costs + Total Revenue
D) Economic Surplus = Willingness to Pay + Actual Price Paid

A

b

28
Q

Why is economic surplus important for society?

A) It helps in setting prices for goods.
B) It indicates the overall benefit from the production and consumption of goods and services.
C) It determines the wages of workers.
D) It reduces competition in the market.

A

b

29
Q

What are costs in the context of economic foundations?

A) The revenue generated from sales
B) All expenses incurred in producing and delivering a product
C) The profit earned by a business
D) The total market value of a company

A

b

30
Q

How does reducing costs impact a company?

A) It decreases the quality of products.
B) It enhances profit margins.
C) It increases operational complexity.
D) It has no effect on profitability.

A

b

31
Q

What is the formula for calculating accounting profit?

A) Profit = Revenue + Costs
B) Profit = Costs − Revenue
C) Profit = Revenue − Costs
D) Profit = Revenue × Costs

A

A

32
Q

What is the formula for calculating accounting profit?

A) Profit = Revenue + Costs
B) Profit = Costs − Revenue
C) Profit = Revenue − Costs
D) Profit = Revenue × Costs

A

c

33
Q

How does the economic measure of profitability differ from the accounting measure?

A) It does not consider any costs.
B) It focuses solely on historical costs.
C) It includes opportunity costs and overall economic impact.
D) It only considers fixed costs.

A

c

34
Q

What is the formula for economic value creation?

A) Economic Value Creation = Price + Cost
B) Economic Value Creation = Revenue − Costs
C) Economic Value Creation = Price − Cost
D) Economic Value Creation = Total Revenue + Total Costs

A

c

35
Q

Why is understanding economic value creation important for a company?

A) It helps in reducing product quality.
B) It reflects the true economic contribution of a company by evaluating the value it adds to the market.
C) It solely focuses on increasing sales volume.
D) It ignores the costs incurred during production.

A

b

capstone (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions